The executors, Darren Indyke and Richard Kahn, said in a statement that the fund would create a "voluntary, confidential, non-adversarial alternative to litigation."
Epstein, 66, died by hanging himself in his Manhattan jail cell on Aug. 10, two days after signing a will and putting his estimated $577 million estate into a trust. He had been arrested in July on federal sex trafficking charges, to which he pleaded not guilty.
His estate is facing about a dozen lawsuits from women who say Epstein sexually abused them, many while they were underage.
The proposed compensation fund, which must be approved by a U.S. Virgin Islands court, would be overseen by administrators including Jordana Feldman and Kenneth Feinberg, who have worked on compensation funds for victims affected by the Sept. 11, 2001 terrorist attacks in New York.
Women who choose not to take part in the program would still be allowed to pursue their claims against the estate in court, according to Thursday's statement. It was not immediately clear how much money would be available for the victim compensation fund.
Attorney Roberta Kaplan, who represents one of the women suing the estate, expressed skepticism of the plan.
"Given that this latest fund was launched without our input or consent, we will keep an open mind because we are supportive of attempts to fairly compensate these survivors, but both the estate and the new administrators have a lot to prove," she said in a press release.
"If the estate is placing all estate assets into the claims program for victims, then it is a step in the right direction," Brad Edwards, who represents multiple alleged victims, said in an email. "In the meantime, we intend to get the filed cases to trial quickly. Either way, justice for our clients, without delay, is our goal."
Following his July 6 arrest, Epstein pleaded not guilty to sex trafficking charges involving dozens of underage girls at his mansions on Manhattan's Upper East Side and in Palm Beach, Florida, over several years.
He had escaped federal prosecution by pleading guilty in 2008 to Florida state prostitution charges, an agreement now widely considered too lenient.The financier once counted U.S. President Donald Trump and former President Bill Clinton as friends. They have not been accused of wrongdoing.